Lung morphogenesis depends upon epithelial-mesenchymal interactions. These heterotypic tissue interactions appear to mediate morphogenesis and differentiation. It is further suggested that glucocorticosteroids enhance epithelial differentiation into type II cells which produce pulmonary surfactant. Our hypothesis is that glucocorticosteroid-responsive mesenchyme cells mediate the instructions for epithelial differentiation into type II cells. Experiments are designed to determine the precise time and localization of these hormonally-regulated mesenchyme-epithelial interactions in congenic murine strains (i.e. B10 vs B10.A), to test the specificity of these interactions, to define when and where steroid hormones effect lung mesenchyme and/or epithelia, and to describe the temporal and spatial changes in the lung basal lamina during embryonic and fetal morphogenesis and differentiation. To test our hypothesis we propose to use the model of embryonic and fetal mouse lung development in vivo and in vitro using a serumless, chemically-defined medium. These investigations will include experimental embryological procedures of iso- and heterchronic and homologous and heterologous tissue recombinants. Additional methods include indirect immunohistochemical localization of basal lamina constituents (e.g. type IV collagen, basement membrane proteoglycans, laminin and fibronectin), high resolution autoradiographic localization of (3H)-dexamethasone binding in mesenchymal and/or epithelial tissues during development and (3H)-choline incorporation into type II epithelial cells (i.e. pulmonary surfactant). We further propose to chemically detect and quantitate pulmonary surfactant as our assay for type II cell phenotype. These studies should enhance our collective understanding of the role of mesenchyme and glucocorticosteroids during embryonic and fetal lung development, the implications of immunogenetics, and the process of functional maturation in the mammalian fetal lung.